How Labour and Demand Supply Affected Under Various Circumstances


In each of the following situations, explain how labor demand and supply is affected by the changes described (assuming all other factors not described as changing are constant). What happens to the equilibrium wage and quantity of labor in that labor market?  Use diagrams and explain your answer in words.  Be sure to identify and distinguish changes (shifts) in demand and supply and movement along the curves.

a) Increased popularity of computers and tablets on the labor market for software developers.

b) Declining prices of computer software on the labor market for workers who use that software to produce the output their firms sell to customers.

c) Local government decision to cut teacher’s wages by $6 wage per hour on the local labor market for teachers.

d) The invention of washing machines, dishwashers, lawn mowers and other labor saving devices that reduce the time it takes to do housework.


This question belongs to economics and discusses about how labor demand and supply is affected under various circumstances.

Total word count: 363


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